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tv   Mad Money  CNBC  August 28, 2013 6:00pm-7:01pm EDT

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watching. get better, buddy. >> get better. >> sales force. i think you'll be long in earnings tomorrow. >> domenic chu, great job today. i hope you enjoyed it. >> inext. watch "street signs" tomorrow at 2:00 p.m. eastern time. i'll see you there. jim cramer begins now. my mission is simple. to make you money. i'm here to level the playing field for all investors. . there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends, i'm just trying to save you a little money. my job is not just to entertain you but educate and teach you. so call me at 1-800-743-cnbc. it's called the circle back. and it's what you do when you think the coast is clear. you circle back to the stocks of companies that just reported excellent quarters where you said it's moved too much.
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but if we get a pullback, i'm buying! because that's exactly what a correction is for. we saw bunch of circle backs all day today. day where the dow gained 38 points, s&p climbed .27%, nasdaq jumped .41%. we all have our lists of what's worth circling back to, what got away and what never looked back until now. when the combination of syrian air strike fears, and anger about upcoming political wrangling in washington have cast on the stock market and they've combined to keep, let's say the average is not doing much this month except for going down. keep in mind that this toxic brew along with higher gas prices and stretched stock valuations have made the market more perilous than it's been in some time. we've got to ask ourselves, which are the least perilous stocks we buy once you believe the market has baked in the latest bad news? i don't think it has yet.
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but maybe you think the worst is over. i'm going to try to help you, okay. let me give you the list i've been working off of. in part because i run a charitable trust. you can follow it along, and part because i came out here many times in the last six weeks and told you to wait for a pullback in certain stocks. the pullback's here. i can't now say wait for another pullback. i've got to at least be true to what i told you earlier. first, because it is freshest, is retail. two retailers stood out among a totally, you know, look, just a terrible group. two retailers stood out as having magnificent quarters. the first is tjx, tjx sells off-priced apparel and the second is urban outfitters in the midst of an exciting turn around. the major department stores are wallowing in excess inventory and tjx has the cash to take that merchandise off their hands at ultra low prices and sell it to you at a testifity profit. and good reports from flagship
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urban outfitters, of course. they were so outstanding they made the flagship brand look bad in comparison. to me, that's one more chance for things to improve. have pullback, will buy. we've got fantastic reports and a terrific pipeline look see from celgene and gilead. and they act like trampolines underneath them. and, of course, you don't need to buy them tomorrow. they have already started their bounce let's say this, play this out. let's say you get something bad out of syria. you come in, futures are down ten. the s&p futures, something in washington's going awry, washington can't help itself, they're torturing us over the debt ceiling. all these things could happen, because the fed scaling back the bond buying is deflationary, right? that means we'll pay more for the future earnings for these two biotechs, and then you've
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got the ideal situation to buy celgene and gilead, but have the futures down first. speaking of trampolines underneath stocks, during the earnings periods past, i made note of companies doing real buybacks. not the ones that allows execs to sell options into, i mean buybacks meaningful every day, that were impactful and buoyed stocks up on ugly days on the market. i'm thinking about the down ten, down 15 futures call here. do you know there was one that really did act as if it was just a big firefighter trampoline. one of those nets. you know what it was? it was viacom. viacom. here's a company that doubled its monster buyback from $10 billion to $20 billion when it reported. the stock has not given you a single break to get in. still hasn't. huge buyback is just standing there. if you get a selloff from the rocket's red glare in syria, i say you buy viacom and let that buyback walk you up to where the stock was before it got hammered by the market. it's only if viacom gets hammered at all. sure hasn't happened yet.
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you've got earnings from the retailers that i really like and this viacom situation that i think is very, very attractive. and let's take some more. how about humana, it's up 35% for the year. but humana's the clearest winner under the affordable care act and reported one of if biggest beats in the race. humana won't be dinged at all. this is a stock i never recommend, you know why? you haven't had a single pullback. check that chart, now you might get one. in it, terrific place to go on those down 12 futures. sometimes we've got to put them to work right at the open when we get big down days because they are so powerful they take every stock lower. including ones that shouldn't go because, remember, these have no impact on the oil futures. that means you can be in there buying eog resources, they are actually getting hurt yesterday even as oil was flying. such is the lunacy of the stock market, people sell some baskets containing these two stocks causing them to go as the net
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worth is going up. huge! i find this kind of insanity to be the stuff of totally great trading. be ready. how many people remembered to reach for b & g foods that keeps posting better and better earnings after making additive acquisitions in a stock that rarely gives you a price break. now you have one, down almost 10% with 4% yield. it's precisely what you'd have to be bidding for when the missile fly. the only goods play that should be bought at these levels. remember that starbucks quarter? it was the best one they ever reported with fabulous growth everywhere, especially china and the united states. i know 5% pullback isn't that much. but you aren't going to get a huge downdraft in the stock given how well the company's doing. i urge you to buy on any weakness now that we're getting some. i can't say, hey, i'm waiting for a lot more weakness. i keep thinking about this quarter. remember when earl simon was here last week. not much opportunity there if you're waiting for a pullback, which i said you should do. the quarter was fabulous. but i'm going to marry the hain
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thesis to the whole foods story. you have an amazing opportunity to buy at a big discount to where it was when it reported a fine quarter. makes a ton of sense considering that hain has just given you an update on its business and its business goes hand in hand with whole foods. finally, time to circle back to boeing. here's a company with a 20-year outlook, reported a dynamite quarter, gave you zero chance to get any discount, and it's never safe to say the dreamliner's problems are behind it, we do know one of the chief orders came from, what, higher jet fuel. that's right. higher jet fuel, and given the trajectory of oil, you can't get dreamliner until 2019. look, i wish i had more to give you. i mean, i wish i could tell you go buy linkedin and yelp, they reported amazing quarters, they're barely down, that makes me uncomfortable. i have no traditional tech names at all i feel strongly about. i can't count on any bank stock yet because there's too much
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turmoil in washington. many of the consumer packaged goods stocks only yielded 3% and change. too early, utilities, no thank you. housing gone from amazing to plain bad. again, adding up so quickly we have to wait until the fourth quarter to see if people don't mind the new interest rate sticker shock. i don't have a lot of stocks that aren't down enough and i'm not calling a bottom line. the circle back will be in effect tomorrow. look for companies that reported terrific quarters recently and be ready to start nibbling when the smoke clears, that way you'll have the conviction to buy more. am i doing this for my charitable trust. today when the market was down, we committed some, some of the trust's cash. only stocks that had fallen so far that the purchases helped our cost basis or what we paid for the selloff. that's my way, my discipline. we left plenty of room for more. plenty of room. if things go awry, and we know in the middle east if things go as planned, that is if there's a plan at all, we've got the cash to put to work as stocks go even lower. joseph in wisconsin.
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joseph? >> caller: jim, boo-yah from osh-kosh. i was listening to you yesterday talk about bristol-myers in terms of turmoil, global uncertainty, it's a pretty okay thing to do for the bio industry, but what about smaller companies, like srpt, pcyc, acadia pharmaceuticals. is that okay to keep your money in the smaller companies? >> okay. the answer to that is it's case by case. but we are big believers that in this kind of deflationary environment, which is what we may be getting again because rates went up so much, that's good for the smaller biotechs. and we know that the biotechs are still in bull market mode because we've got two leaders. and they're saying, hey, listen, it's still okay to buy. i sanction buying biotech stocks, many have worked out. there'll come a moment when we
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won't be able to recommend them. we're not at that moment yet. mike in louisiana, mike? >> caller: yes, sir. thank you for taking my call, mr. cramer. >> no problem. >> caller: and what i'm interested in is agio. when i first bought it, it was doing really well. it was climbing a lot, but did an about face on me. should i sell? >> that had good bankers. i'm surprised that stock has come down so much. i thought that was a very good speculative situation. i actually don't want you to sell. i think that, you know, therapeutic cancer metabolism stories, we've liked those. but no, as long as you regard it as a spec. it is not a regular investment, it is a spectacular spec and i do not want to sell it at 23. frank in florida, please. frank? >> caller: hi, jim, big boo-yah from frank in ocala, florida. a few weeks ago i asked you about my wisdom for buying southwest airlines. now i've noticed all the airlines have taken a dip.
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should i go ahead and sell, buy, or hold? >> well, i think the airline business is being -- look, the sudden rise in jet fuel prices was not anything that a lot of people foresaw. i think the stock can rally. and when it rallies, i think you have to sell it. why? because the u.s. airways/amr deal is not going to go through. and that's the game changer i was counting on for the next leg-up in the airlines. it's not going to happen. as it goes up, i need you to trip. circle back, circle back to the stocks with outstanding quarters. and when things look more clear. coming up -- home alone? the housing market helped drive stocks higher for most of the year, but as rates shot up, the open house closed. is the home sale horizon really that dire? or could this market still build? cramer's exclusive with realogy ceo. is this opportunity knocking? or the beginning of a deep
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devastating decline? tonight, it's a special check of the technicals, cramer's zeroing in on signals that could be telegraphing its next move when he goes "off the charts" all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. when we made our commitment to the gulf, bp had two big goals:
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what is the new normal in housing? in the wake of the massive run in interest rates albeit, off a low basis, all the housing and housing-related stocks have been viciously hammered. worried the increase in mortgage rates will scare people away from housing, put a big crimp in the volume of home sales. have these stocks been punished enough? take rlgy, chain of 700 company
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owned brokerage offices, more than 13,500 franchise offices, operates a number of different brands. you know them all, better homes and gardens, real estate, sotheby's, this is a pure play on buying and selling homes and the company's so darn big that last year it was involved in 26% of all u.s. existing home sales. that at least involved the broker. if you want a proxy for housing transactions, realogy is it. reported a month ago at the end of july despite the climbing interest rates in may and june, the results were spectacular, 22 cent earnings beat off a 23% basis. transactions volumes up 21% year-over-year. management guided for 17% to 19% growth transactions for the next quarter. realty stock has been crushed since it peaked around 55 in mid may. as the conventional wisdom says, the business has to slow, dramatically in the reaction to rise in mortgage rates, which means the estimates are too high for realogy.
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the stock dropped from the high, 23% decline. these levels is trading 15.5 times next year's earnings, plus a growth rate. that seems cheap. with the latest declines, realogy is given you a 13% gain since the end of november. let's check in with richard smith, the chairman and ceo of realogy holdings, someone been through many cycles, three whole housing cycles. mr. smith, welcome back to "mad money." thank you, sir. where are we? because there's a lot of people who feel that if the fed tapers, it's a one-two blow, it'll be too much for this cycle. >> this is an extraordinary correction. we're coming out of a seven-year downturn, it's going to act different than any other recovery. enormous pent-up demand. you have extremely low mortgage rates even with 100 basis point increase over the past several weeks, it's still by any saturday very cheap money. >> how about the home sales
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which showed a decline today? >> well, i wouldn't worry about a month not in a recovery that's going to take several years. think about in this context, the builders report about a 13% decline, the existing home market reported a 1% decline. so a month is not something to be concerned about. but that does indicate a sensitivity to rates. >> see, but what i'm concerned about is process, you have a lock-in on an existing home, lock-in on a new home. they're very different. the banks, they're backed up. suddenly you get a situation where you might have thought you were going to get 3 3/8 and you're getting 4 3/4. what do you tell those people? >> it's fantastic news when it comes to lending environment and rates. >> okay. >> think about it from this perspective. we have in our tool kit, the ability to forecast opens and for a 90-day period. we can tell you whether or not there's a sensitivity to mortgage rates and it's impacting and the consumer's willing to close that
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transaction. our cancellation rates are at historic lows. there's a reason for that. i can lock a rate with a lender for 60 to 90 days at almost no cost. i can't do that with a builder. for the builder, i'm for a six, seven, eight nine-month period. that's something that both the builders. >> it's a little bifurcated. >> the really good news about lending today is that recent decisions on dodd/frank which you're probably aware of, that is a substantial limiting factor as to the availability of credit. so, listen, we say all the time that under the circumstances that we're seeing any kind of improvement is amazing given the difficulty in the lending environment. >> what is the -- last time you gave us the average fico was so high. >> it's still high. there's a reason for that. under the new rules that are being circulated for public comment under dodd/frank, which would limit a repayment requirement for the retention rule, that's terrific news for lending. that is truly going to have an
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impact on the availability of credit which we think will also impact the ability of the first-time buyer to truly enter the market. >> do you think there's some areas based on case-shiller and some of the data you have that have gotten too hot? >> no, i don't think it's -- i think we're a far cry from fair value. i mean, remember, 34% peak to trough, we've got a ways to go now. here's what's nice about housing, we're reverting to the norm. >> right. >> what's relevant now is relevant in that local market. so in some markets where you've seen a big run-up in price, florida's an example, las vegas is an example. you may be close to fair value. but every other market in the country's going to act differently. it's going to depend on the local market dynamics, not the national scene. >> i know realogy's view is the funds that brought up a lot of homes still minuscule versus the entire. they bought ha lot of hot areas. are they going to get burned? >> no, depends on the model. and remember, put in context, they've acquired about 60,000
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homes, they have the capacity to acquire another 60,000 homes on 5 million units in a given area. that's a minimal impact. they were buying a lot of inventory, they had a favorable impact on local property values. >> okay. >> okay. there's some talk in the way that your quarter went that the commission -- that some people just were -- they had too many bountiful commissions. i have a lot of friends in real estate and they're never going to tell me it's too bad. where is that -- how does that change? if you wanted to, you could ratchet down the commissions, i don't think that would help because you get people not working that hard. how does that change -- how does the balance of power work between the top brokers and your company? >> well, the top brokers produce the bulk of the business. at some point, there's so much business that the second, third and fourth-core tiles start participating, as well. this is like any other business. there are top producers, the people you pay the most are
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producing the most of the business. when it becomes so voluminous that anybody can participate, that's when they change dramatically. >> we're not there yet. >> we're not there yet. >> i look at zillow all the time, i don't know if you think these accurate or not, but some areas have started coming down. is that a natural reflection of the rising interest rates? >> yeah, i don't think pricing's reacting to interest rates. you have demand outstripping supply. we still have inadequate inventory. i don't think price is reacting to 100-basis point movement in mortgage rates. >> at what level? is it 5.5%? look, all we do all day here on -- there's tremendous predominance of talk that the fed is going to stop buying bonds and maybe rates go up dramatically. there's got to be some level where people say, you know what, i'm going to wait until they come down. >> when the rising rate environment is reflective of an
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improving economy. it's what in my view what the market will bear. at the peak, rates were about 6.5%, i think we've got a long ways to go before it's a major problem for housing. >> right. do you think -- i'm trying to get the right metaphor for the time. in '09, afraid the light at the end of the tunnel could be an oncoming train. are we now to a point where what we could be maybe get a little bit of a pause and then have a giant long runway? because you were talking about early innings, or is this about as good as it's going to get? >> it's a seasonal business. most of us have fought the seasonality in the business. we're going into the downturn in the first quarter. the first quarter is never a good quarter for housing, the second and third quarter represents the bulk. we will be the best judge of that about the end of the first quarter next year. the national association of realtors has not taken its eye off the forecast for the year. so the unit forecast stays intact. >> and you're totally on board?
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>> 17% and 19% sales volume, third quarter, no problem there at all. so we're -- listen, the long-term metrics are very favorable for the early stage housing recovery and that's where we think we are. >> excellent. okay. that's richard smith, the chairman and ceo of realogy holdings. pretty big. stay with cramer. coming up, fed rising? is this pullback opportunity knocking? or is it the beginning of a deep, devastating decline? tonight, it's a special check of the technicals, cramer's zeroing in on signals that could be telegraphing its next move when he goes "off the charts." (announcer) at scottrade, our clients trade and invest
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so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. after yesterday's brutal syria-fueled decline, i'm calling a special wednesday chartnado edition of "off the charts." is it over? does today's rally mark some kind of bottom where the selling stops? or will there be more pain ahead like i suggested last night? this is a market where the unemotional discipline of the charts has been accurate. in order to help answer these questions about the selloff, we turn to a brilliant technician who puts the queen in fibinacciqueen.com. she thinks the benchmark index
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could soon make an intermediate term low. daily chart of the s&p 500, ever since the s&p started falling back on august 2nd, she's been monitoring the size of this decline in terms of the number of points it crushes and the length of decline in terms of how long it takes. now, remember, it's all about ratios, the cycle of members of -- cycle of numbers discovered by the mathematician that repeat over and over again in nature and according to some in stock charts, as well. on the price side of things, if the rally in the s&p is going to resume any time soon, then the index needs to hold above the low it made on june 24th, and that's 1,560. she sees not one but two floors to support propping up the s&p between where it is at now and that potentially lethal 1,560 level. first, there's a nice floor based that comes in between
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1,560 and 1,621, not that far below where we're running now. there's a second floor between 1,578 and 1,582 and both could mark the level where the s&p 500 bottoms. if you're only looking at price at the y axis of this chart, you might be missing something huge. for her, at this moment, it's time! it's time the x axis that is really important. brodin believes we could see a bounce and end to this decline somewhere between now and labor day weekend. and that would be huge if that happens. how does she reach that conclusion? measures the length of prior swings in the s&p and extrapolate forward to find dates it seems likely the market could change the trajectory. this chart goes back more than two years. and in it, we see a host of declines with the s&p 500 decline drop somewhere between 20 and 23 days, 23, see that? before the decline ran its course and the rally resumed.
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so far, this current selloff has lasted for 18 days. so, if it is anything like the most recent 22-day decline in may or june or the low 20-day declines in 2011, this pullback we're mired in could be done in two to five trading days. and that's looking at 100% retracing of these declines. here they are again, 61.8 and 100%, because these key ratios seem to show up when securities change their trajectory. and what she finds is there are a host of timing cycles coming due in the next week or so. any of which could mark the moment when the s&p 500 takes a turn for the better. the method is to look for timing of these cluster cycles and what we have now. the chartwork suggests that the s&p could stop declining between today and september 4th. we know it'll likely get pounded tomorrow if we get closer and closer to what happens in syria. but she wants to focus on when the pain will stop and looking for a trend reversal in the next
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week based on her chart work. and you can see something very similar happening when you look at the chart of the dow jones industrials. okay. just like with the s&p, it has been 18 trading days since the dow started to decline in the beginning of august. now, when you look at the major past declines in the dow going back to the second half of 2011, what you see is they have lasted between 20 days and 28 days, okay? see it? all those? and they're mostly costing around 22 or 23. so if we assume the current selloff in the dow will last for a similar amount of time, we could be looking at a genuine bottom on friday. which would be day 20 or perhaps next wednesday or thursday, which would be trading days 22 or 23. either way, the methods suggest there's a strong chance the dow will be rising and rising consistently again by the end of next week. remember, she's a technician, not taking into account the labor report, the mark-up at the end of the month, she's saying the charts say we're about
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there. even if she misses these timing cycles aren't perfect predictors, they've worked for her in the past in amazing fashion. but if the dow and s&p keep falling next week and the week after and totally ignore the timing work, she says you have to consider the whole scenario a bust and be braced for more agony. oh, one more thing from the fibonacci queen. she says if we don't see an immediate bottom over the next week, that means we could be facing a much steeper correction going forward. so unless we bottom, well, i don't know. you might say that's in the alternative and that doesn't matter. but she's saying it is going to bottom. how about a second opinion. in last week's off the charts, we consulted dan fitzpatrick, also one of my realmoney.com buddies and warned us that the s&p 500 had entered dangerous territory. his prediction was for pain! and he was dead right. so what does fitz think about the selloff?
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take a gander of the s&p, you won't like this. he points out that yesterday the s&p 500 did something really bad. it completely broke down through the 50-day moving average. a very important short-term measure of the index's trajectory. we are firmly below that key moving average, something every chart follower out there regards as being extremely negative. see, just that little line where people don't follow charts. taking out that line is extremely dangerous. now, the last time the s&p broke down below the 50-day moving average was in june and it led to a really hideous selloff which lasted until the s&p bottomed at 1,560. there's that number again, nearly 80 points below where we are right now. that level is important to fitz because it defines the maximum selling pressure in the last decline. as it happens it is also at around 1,560 right now. but the 200-day moving average is rising which means as time goes on, it will be further and further above that -- of that make or break 1,560 level.
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good news, because fitzpatrick thinks the moving average is the s&p's new floor of support and the potential downside shrinks. this is going to go up, okay. so you've got kind of a convergence there that will make it so it not just has to go all the way down to here. his view of what will happen, fitz believes the s&p has peaked for the year and it'll be stuck in a trading range until 2014. he thinks the outcome is the index will test the 200-day moving average, probably around there and it'll then form the bottom of a new trading channel with the 50-day moving average forming the top of the trading range. that means we could fall another 4.5% or so before the pain ends. i don't know, i think that seems realistic to me. here's the bottom line. what can we take away from the two technicians for our emergency post pullback off the charts technical? the decline in the s&p could likely be ending in the next week, dan fitzpatrick sees less
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to be hopeful for. he thinks it could fall another 4.5% before the current decline comes to an end. to me, all this says keep your eyes peeled for potential bottom, pick up the individual stocks at the top of the show. never forget that we could go down the 4% that fitzpatrick says we're certainly headed to. dan in florida, dan? >> yes, sir, king james. >> yo yo. >> what's your thoughts on agnc, buy, hold or sell? >> these things are hard -- they're really creatures of the taper, they could really get hurt. i've been right to steer clear and i'm not changing my view and i know @jimcramer on twitter i get attacked, but it's been right to stick by them. i'm not backing down. frank in florida, please, frank? >> caller: hello, jim, this is frank in naples, florida. >> excellent. >> caller: i'm calling about, i know central africa very well and there's a fine outfit which
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is called rand gold resources which is one of the top -- maybe the best gold miner in the area. american analysts don't seem to know much about it but you've got chinese and you've got middle eastern wealth -- sovereign wealth funds which is sniffing around. and i wonder what you thought about it. >> this is mark bristo, we've had him on, he's a great ceo. i don't like the gold stocks and it's been -- i like gold. if you have to own a gold stock right now, he's delivered the best of the other companies. he's done better than that, agnico, done better than that. the problem is, the gold stocks have not been as good as the precious metal and i like the precious metal. can i go to jason in louisiana, please, jason? >> caller: jim, big boo-yah, got a quick question for you, buddy. i've made 20% this year due to
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all your information, and i'm kind of scared about the pullback. i'm wondering if i should sell everything i have, wait for a pullback and invest back in to make major money. >> thank you for asking this question it's on my mind. if i'm negative, why don't i tell people, i'm thinking you won't be able to get back in. i'm trimming stocks i don't think are great. the charitable trust are trimming stocks. i think you should trim the stocks you feel aren't that great anymore because they've appreciated or because this isn't that good. and i would do that tomorrow. in today's break glass in case of emergency off the charts chartnado #divergence, let's say we've got one fibonacci queen says it's almost over and fitzpatrick says lookout below. stay with cramer. still ahead -- is your portfolio prepared for a pullback? call, tweet or e-mail cramer to get a check-up. "am i diversified" is just ahead. ♪
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it is time -- it is time for the "lightning round" on cramer's "mad money." play until this sound and then the "lightning round" is over. are you ready, time for the "lightning round" on cramer's "mad money." josh in new york, josh? >> hey, jim, how's it going? boo-yah. >> boo-yah. >> caller: i have a question about the most wildly successful stock i bought in a while qcor, do you think it's looking up in the future and going to keep skyrocketing like it is today? >> this is a stock that got slammed by the shorts. they drove it down to the 20s, tested my patience with it, tested my metal, my metal failed. i got this wrong, it came all the way back, i should have never wavered, it's had a big run, it's not up to me anymore.
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i called this one wrong. i wavered when i should have been telling you to buy. richard in ohio, richard? >> caller: jim. >> yeah. >> caller: rich from ohio. >> how are you? >> caller: scco. >> okay. on the dismal joy global call today sutherland ceo was i think a little too bullish when he was here last did talk about how copper is good, but i don't think copper's that good and i don't want to own that stock. edward in california, edward? >> caller: yes, hello, righteous boo-yah from the coachella valley, jim. i want to say thank you for all you do. and i'm wondering with the solar plants in the southwest, what do you think about sunpower? >> that is captive to how first solar works, and first solar has been horrendous. if i wanted to own a solar stock, i would own first solar. let's go to richard in new york,
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richard? >> caller: hi, jim. >> hi, richard. >> caller: this is richard from long island. >> excellent. >> caller: warren buffett just came out with a public statement claiming to buy general motors. >> right. >> caller: what do you think about that statement? >> gm is expensive, and i believe there's a turn in europe and china, i think gm should be bought and warren buffett is going to be right. i would like to know if warren buffett is dumping ibm, that's a big rumor today. let's go to sam in minnesota. sam? >> caller: hey, jim, boo-yah from minneapolis. >> oh, nice, what's going on there, adrian peterson, what's happening? >> caller: not too much. my question's about take two interactive, ticker symbol ttwo. -- beat earnings estimates but forecasted -- >> it's been -- it's finally got it right. it's got the gaming cycle going for it. it's got great momentum. i'm going to say it's a momentum
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stock. i don't want to comment further than that. steve in pennsylvania, steve? >> caller: big boo-yah, buddy from the 'burgh. how are you doing? >> good. >> caller: i'm looking at crude by rail tbf energy. >> no, refiner play. let the yield get to seven before i'm going to push that stock. i've got to tell you, that's been a dog and i don't like that group and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.
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look, it's been tough. the market is skittish. we're all skittish as we worry about events overseas and at home, we've got washington, we've got the situation in syria. regardless of everything happening at "mad money," we work to protect portfolios no matter what the market may throw your way. it's called diversification. it happens to be my favorite game. call or tweet me @jimcramer, tell me your top five holdings and i tell you if you need to mix it up a little to keep
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yourself diversified. i'm watching netflix, the futures, my twitter stream and reading a book, am i diversified? let me see, twitter is internet, netflix is internet, the futures are financial, reading is -- let's call that amazon. no, you've got to mix that up a little. how about like meeting someone and maybe like go to the movies? there, okay. get diversified. i mean, have a date. all right. yeah. i mean, focus. kristin in florida. kristin? >> caller: hi, jim, how are you doing? >> all right. how are you? >> caller: good. i've got facebook, aig, corning glw, royal bank of scotland. >> aig is a financial, it's largely insurance company, owned by the charitable trust,
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synovus, that's two of a kind, aig, three of a kind. corning is a technology company that does glass work and facebook is internet. we're going to keep aig, royal bank we'll get rid of, get a health care company, i'm going to integrate bristol-myers right there and then let's do diversified industrial -- oh, what am i in the mood for here? i want to do lockheed martin. i feel it's right. let's go to jason in washington, d.c. i want lockheed martin ceo. jason in washington, jason? >> caller: jim, boo-yah. >> boo-yah back. >> caller: thank you for all your service, everything you've done for us everyday investors and financial planners of guys like myself. >> well, thank you, i want everybody to be a better client, better adviseadviser. what's up? >> caller: yes, sir, yes, sir. every day.
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onko med, pharmaceutical, bank of america, medical property trust, adviser and google. >> okay. whoa, well, real estate investment trust is not going to be the same as onko med which is a speck, we know that bank of america is a financial. channel adviser and google, they're actually, like, they're one in the same, both internet plays that google's got big advertising arm, we're going to sell channel advisoadvisor, bin bing, bing, and let's put in b & g foods. "mad money's" back after the break. i'd like to know, are you long america? >> we at ford in the united states are competing with the best countries in the world. >> look at the global competitiveness by any measure. my life story can be your life story.
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you can start with nothing in america and create the american dream. clients are always learning more
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to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
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we saw a really telling divergence today. one that's just begging to be noticed because it's speaking louder than anything else i'm watching. i'm talking about the nonstop selloff in the consumer packaged goods plays versus many other
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portions of the stock market. neither proctor & gamble or colgate were able to rally. what does that scream? i think that interest rates aren't done going higher. today's climb back up is for real. remember, these stocks are part of that bond market equivalent trade and they failed to rally when rates dipped back down the other day telling me that the recent decline in rates was not for real and that we will soon see the ten-year sporting a 3% yield. of course, there could be other forces at work here. principal cost for these companies is oil. product haves to be shipped to the merchants, they use packaging that requires plastic that requires energy to be made. plus, these companies often sell into the emerging markets where the growth is for them and you notice, have you noticed, thor merging market are getting crushed here. maybe the purchasing power in the emerging markets are getting crushed too. i think it comes down to interest rates. these packaged goods stocks were terrific for so long.
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even the worst ones, the ones with the least growth flying higher. i know i talked about how angry i was that my charitable trust sold these on the way up rather than holding on as they kept going higher. i thought the valuations were ridiculously stretched. a the the top, they were valued much more richly than biotech stocks. despite the fact they only have 3% organic growth or less. and from the looks of it, they had further to fall. 4% is the new 3%, 4% yield breaks the fall the way the 3% yield used to. first you've got to recognize that it might be years before you actually see those 52-week highs again. that's because at their height, these weren't just fixed income plays. and it's clear from the action and all the taper talk we aren't going to see low rates any time soon. while the companies have terrific consistent earnings, if the company takes off, the stocks will do nothing, nothing at all. most of the companies are too big to be taken over. your best hope is that management decides to break the businesses up and their yield
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sell at a hefty premium to the ten-year. finally, fifth, perhaps if the fed tapers, slowing the economy, particularly housing, people believe we're going to slip back into recession, then the consistent earnings streams, the packaged goods names will make them more attractive. but i think that still won't move the stocks up much at all. it will make them relative outperformers as the rest of the market gets whacked. they have become sales and you can and always do get lifts with these stocks. maybe i'll be wrong again, but with the prop of lower rates, i think the group's dead money. at best, they cannot do it without that prop and that's no place you want to be. [ male announcer ] i've seen incredible things.
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time to have new experiences with a familiar keyboard. to update our status without opening an app. to have all our messages in one place. to browse... and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10. it's time. all right. so let's understand each other. i don't think that we're done going down. but i also now want to put the shopping list together. you circle back to the best names. give you a classic example. when you take a tjx, they do well when the rest of retail does poorly. boeing does well with oil prices go higher. you're acting on the current scenario to pick stocks you already know did well because you just listened to their conference calls.
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we obviously -- if we just got the fed to say we are not going to taper until we're done with this nonsense, then we go back up and that's why you have to start picking at things into the weakness. there's always a bull market somewhere, i'm jim cramer, i'll see you tomorrow! jim cramer. i will see you tomorrow. will the bombs start flying in just a few hours? the senior administration source tells nbc news that, quote, we are past the point of no return, and air strikes against syrian targets appear inevitable within days. but i don't understand why we're telegraphing every punch and leaving assad and his regime in place. we're about to speaking to former defense secretary donald rumsfeld, and find out what he thinks president obama should do. stocks rebound today, but the syrian news drove gold and oil higher. are you about to see bigri

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